Outsourcing in China's Banking Industry Reached US$33B in 2010

Outsourcing in the banking industry in China reached US$33 billion in 2010, with IT outsourcing accounting for 75% at an annual growth rate of 12%, and BPO accounting for 24% at an annual growth rate of 20%.


In a new report, "Outsourcing Trends in the Chinese Banking Industry," Celent examines the market size, customer segmentation, outsourcing business scope, and players.


The major BPO businesses are credit card, disaster recovery, call center, and data processing. Current major customers are joint stock banks and city banks, and it is because they don’t have a large IT team like state-owned banks.


Recently, state-owned banks had outsourcing trials, and there are many successful cases, so they will start their outsourcing in the near future. Another potential field is rural banks, and the number of new rural banks will reach 1,000 in 2011.


While large state-owned banks have mostly outsourced to their own software centers and data centers, or to service providers such as IBM and HP, small to medium-size commercial banks have mainly outsourced to professional technology firms.


Small banks are a potential market, and their current outsourcing business is credit card outsourcing.


“In terms of scale, the largest outsourcing service providers are software and data centers of large state-owned banks,” says Hua Zhang, analyst with Celent's Asia Financial Services group and author of the report, “followed by third party outsourcing companies. The former mainly serve their respective banks, while the latter mainly provide outsourcing services to joint-stock banks and city banks. At present, some service providers are venturing into the new rural bank market and setting their sights on large state-owned banks.”









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